New Jersey Has Settled With a College It Sued

By SAM DILLON

Published: January 16, 2010

The embattled president of Stevens Institute of Technology, Harold J. Ravech?will step down in July, the college said Friday. And under the terms of a settlement ending a lawsuit by the State of New Jersey that questioned his $1.1 million salary, the institute said it had accepted extensive governance changes that would stiffen oversight of its financial management.

Dr. Ravech?ill be paid his salary, which exceeds those earned by the presidents of Harvard, Princeton and M.I.T., for a year after he leaves office July 1, Attorney General Anne Milgram said. And under the terms of his contract, Dr. Ravech?ill be compensated as a consultant through June 2014, she said.

The lawsuit accused Dr. Ravech?f plundering the endowment and receiving $1.8 million in illegal low-interest loans for vacation homes, half of which were later forgiven. It also accused Stevens of using multiple sets of books to hide its deteriorating financial condition.

Stevens sought to have the lawsuit dismissed and to have court proceedings sealed, but never answered the state's allegations point by point.

Prosecutors and Stevens lawyers negotiated the settlement this month, in Ms. Milgram's final weeks in office, her aides said. Governor-elect Christopher J. Christie, who takes office Tuesday, has nominated the Essex County prosecutor, Paula Dow, as the state's new attorney general.

The settlement fell short of many of the demands in the New Jersey complaint, which included repayment to Stevens of ''unreasonable and improper'' compensation payments made to Dr. Ravech?and the removal of Mr. Babbio as board chairman. Under the settlement, Mr. Babbio, a former Verizon president, will keep his post for about three years.

Still, Dr. Ravech?ust repay the approximately $750,000 balance on the mortgages by July 2014, prosecutors said.

In a joint statement, Mr. Ravech?nd Mr. Babbio said Stevens was ''well positioned to achieve ever-higher levels of greatness among the nation's and world's research universities.''

In a separate statement, Dr. Ravech?aid the formal settlement did not require his resignation. ''I have made this decision in the best interest of Stevens,'' he said.

Jack B. Siegel, a Chicago lawyer who follows nonprofit cases, praised some elements of the settlement, including that ''the person who is the lightning rod isn't going to be there anymore,'' and that the governance changes coming to Stevens were ''impressive.''

But he said it was unfortunate that the settlement included no admission of wrongdoing by Dr. Ravech?r Stevens.